Dreamscape Networks Ltd (ASX:DN8) has entered into an agreement to acquire Sydney-based Enetica Group for a consideration of circa $4.5 million.
Enetica Group is into hosting and domain businesses and the agreement is to acquire the entities and the assets of its businesses operating as Web City, Enetica and Host1.
Dreamscape is an online provider of domain names, hosting and technology solutions.
The company owns Australian domain brand Crazy Domains and Singapore hosting provider Vodien Internet Solutions.
Importantly, the acquisition expands Dreamscape’s hosting footprint in Australia.
The acquisition will be fully paid in cash using funds from existing available free cash and a short term unsecured loan of $3 million provided by Cloudsafe Holdings Limited.
Cloudsafe Holdings is a company associated with Dreamscape’s managing director Mark Evans.
Enetica Group has more than 15,000 customers and 70,000 registered domains. Hosting contributes circa 76% of its revenue, with domains accounting for the remaining 24%.
Enetica has generated a revenue of circa $3.3 million and a pro forma EBITDA of $1.3 million in FY2017.
Dreamscape’s share price increased circa 12% during the past one week, closing at $0.24 on Tuesday.